Wednesday, June 6, 2012

Rattled Chevron Fires P.R Giant Ogilvy, But Questions Remain

The pressure on Chevron over its $18 billion Ecuador environmental judgment appears to be rattling company management. We already reported how 40 institutional investors hammered Chevron in recent days over its bungling of the litigation, asking that the long-running case be settled before the oil giant suffers further damage to its reputation.

Now we have the bizarre saga of Chevron firing its longtime lobbyist in Washington, the highly-respected and influential Wayne Berman, over something related to the Ecuador matter. The question is what is that something.

Last week it was reported Chevron fired Berman's firm Ogilvy because one of the agency's low-level employees offered advice on environmental public relations at an event organized by Amazon Watch. Amazon Watch is that pesky group of environmental activists who have driven Chevron crazy for years over its failure to clean up its mess in Ecuador. (Note that the young PR executive who spoke at the Amazon Watch event did not even mention Chevron and Ecuador.)

This week Advertising Age reported that Ecuador's celebrated Yasuni environmental project also  "halted its relationship with" Ogilvy. The Yasuni is an area of oil-rich rainforest inhabited by two non-contacted indigenous groups. Ecuador's government is trying to raise money from governments in exchange for a promise never to let oil companies exploit the territory.

We were surprised to learn that Ogilivy was representing Chevron -- a sworn enemy of Ecuador's government given their battles over who should clean up the oil pollution in the country -- and Ecuador's government at the same time.

Is there a connection between the two?

We think so. There is simply no way Chevron could not have known that the firm of its lead lobbyist on the Ecuador matter was also representing Ecuador's government. In fact, we suspect that was all part of the "value" Ogilvy was offering Chevron for its fee of $600,000 per year.

Chevron Pit readers may remember postings from several months ago (here and here) about Chevron offering a bribe to Ecuador's government in exchange for killing or stopping enforcement of the $18 billion judgment against it for massive oil contamination.

The bribe included a $500 million contribution to -- you guessed it -- the Yasuni project coupled with an effort to recruit corporations and governments around the world to raise more money.

But the plot thickens. The person heading up the fundraising effort for Ecuador is Ivonne Baki, who has close ties to Chevron and has tried to intercede on Chevron's behalf before to kill the lawsuit. See this press release and this Miami Herald story. Baki was also reported to be floating Chevron's bribe offer to kill the case from her perch inside Ecuador's government.

How is it that Oglivy and Berman, who have represented Chevron since 2004, acquired Yasuni as a client around the same time Chevron tried to bribe Ecuador through its Yasuni payment?

Was Chevron subsidizing the Yasuni PR effort through its own payments to Oglivy as a way to curry favor with Ecuador's government to kill the lawsuit?

Did Chevron use a young PR exec as a scapegoat to fire Oglivy because the Yasuni bribery plot turned south, possibly exposing company officials to liability under the Foreign Corrupt Practices Act?

Stay tuned.

Ivonne Baki -- Yasuni

Ogilvy- PR Firm 

John Watson -- Chevron

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